EU banking union gets final approval

MEPs have backed rules for a banking safety net to minimise the risk of further EU taxpayer-funded bailouts. A new European authority will have the power to wind up or restructure failing banks - the so-called Single Resolution Mechanism (SRM). The shake-up of bank rules is aimed at preventing crises such as those which hit Greece, Ireland and Cyprus, whose banks were bailed out at huge cost. In future creditors and shareholders will be first to pay when a bank fails. The EU "banking union" reforms will create a 55bn-euro (£45bn; $76bn) fund, financed by bank levies, so that emergency cash can be injected into failing banks. That rescue system will be advised by the European Central Bank (ECB). The 18 eurozone countries will participate in the SRM, though countries waiting to join the euro can also sign up to it. Some analysts say that the rescue pot is too small, and that the eurozone still does not have credible backstops to deal with a major systemic failure like the 2008 financial crisis, according to a news agency.